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Article
Publication date: 13 June 2019

Ünsal Sığrı and Hakan Karabacak

This paper aims to manage better the conflicts in labor disputes by improving the understanding of mediation dynamics from a game-theoretical perspective.

Abstract

Purpose

This paper aims to manage better the conflicts in labor disputes by improving the understanding of mediation dynamics from a game-theoretical perspective.

Design/methodology/approach

Signaling game model is adapted to a hypothetical labor dispute based on the legislative regulations on the mandatory mediation system in Turkey.

Findings

The paper determines mediation equilibria in which both players get positive payoffs. Analysis of the mediation equilibria helps to improve the understanding about the litigation and mediation dynamics depending on the variables. The variables are clearly separated from each other due to their reverse effects on strategy choices of the parties. Mediation payoff and litigation cost are characterized by their incentive effects on mediation preferences, whereas mediation fee and litigation payoff are characterized by their disincentive effect. While increasing amounts of incentive variables strengthen the mediation tendency of the employee, increasing amounts of disincentive variables reveal the opposite effect. Furthermore, the analysis also indicates that if the litigation payoff is too small to recover litigation costs, accepting the mediation becomes the optimal strategy. This prediction is contrary to that of traditional game-theoretic litigation/settlement models, in which small-claim disputes typically cannot be settled.

Practical implications

The assumption that the mediation fee is not a part of the litigation cost eliminates the disincentive effect of mediation fee and makes it neutral on the strategy choice of employee.

Originality/value

This paper first analyzes the strategic role of mediation in labor disputes by using a signaling game. Despite its mediation focus, the paper also provides practical insights for litigation.

Details

International Journal of Conflict Management, vol. 30 no. 3
Type: Research Article
ISSN: 1044-4068

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Article
Publication date: 14 May 2018

Ata Allah Taleizadeh, Moeen Sammak Jalali and Shib Sankar Sana

This paper aims to embark a mathematical model based on investigation and comparison of airport pricing policies under various types of competition, considering both…

Abstract

Purpose

This paper aims to embark a mathematical model based on investigation and comparison of airport pricing policies under various types of competition, considering both per-passenger and per-flight charges at congested airports.

Design/methodology/approach

In this model, four-game theoretic strategies are assessed and closed-form formulas have been proved for each of the mentioned strategies. Numerical examples and graphical representations of the optimal solutions are provided to illustrate the models.

Findings

The rectitude of the presented formulas is evaluated with sensitivity analysis and numerical examples have been put forward. Finally, managerial implications are suggested by means of the proposed analysis.

Research limitations/implications

The represented model is inherently limited to investigate all the available and influential factors in the field of congestion pricing. With this regard, several studies can be implemented as the future research of this study. The applications of other game theoretic approaches such as Cartel games and its combination with the four mentioned games seem to be worthwhile. Moreover, it is recommended to investigate the effectiveness of the proposed model and formulations with a large-scale database.

Originality/value

The authors formulate a novel strategy that put forwards a four-game theoretic strategy, which helps managers to select the best suitable ones for their specific airline and/or air traveling companies. The authors find that by means of the proposed model, the application of Stackelberg–Bertrand behavior in the field of airport congestion pricing will rebound to a more profitable strategy in contrast with the other three represented methods.

Details

Journal of Modelling in Management, vol. 13 no. 2
Type: Research Article
ISSN: 1746-5664

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Article
Publication date: 26 August 2020

Rohit Gupta, Baidyanath Biswas, Indranil Biswas and Shib Sankar Sana

This paper aims to examine optimal decisions for information security investments for a firm in a fuzzy environment. Under both sequential and simultaneous attack…

Abstract

Purpose

This paper aims to examine optimal decisions for information security investments for a firm in a fuzzy environment. Under both sequential and simultaneous attack scenarios, optimal investment of firm, optimal efforts of attackers and their economic utilities are determined.

Design/methodology/approach

Throughout the analysis, a single firm and two attackers for a “firm as a leader” in a sequential game setting and “firm versus attackers” in a simultaneous game setting are considered. While the firm makes investments to secure its information assets, the attackers spend their efforts to launch breaches.

Findings

It is observed that the firm needs to invest more when it announces its security investment decisions ahead of attacks. In contrast, the firm can invest relatively less when all agents are unaware of each other’s choices in advance. Further, the study reveals that attackers need to exert higher effort when no agent enjoys the privilege of being a leader.

Research limitations/implications

In a novel approach, inherent system vulnerability of the firm, financial benefit of attackers from the breach and monetary loss suffered by the firm are considered, as fuzzy variables in the well-recognized Gordon – Loeb breach function, with the help of fuzzy expectation operator.

Practical implications

This study reports that the optimal breach effort exerted by each attacker is proportional to its obtained economic benefit for both sequential and simultaneous attack scenarios. A set of numerical experiments and sensitivity analyzes complement the analytical modeling.

Originality/value

In a novel approach, inherent system vulnerability of the firm, financial benefit of attackers from the breach and monetary loss suffered by the firm are considered, as fuzzy variables in the well-recognized Gordon – Loeb breach function, with the help of fuzzy expectation operator.

Details

Information & Computer Security, vol. 29 no. 1
Type: Research Article
ISSN: 2056-4961

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Article
Publication date: 28 January 2014

Hesham Osman and Mazdak Nikbakht

The purpose of this paper is to present a socio-technical approach to modeling the behavior of roadway users, asset managers, and politicians toward roadway performance…

Abstract

Purpose

The purpose of this paper is to present a socio-technical approach to modeling the behavior of roadway users, asset managers, and politicians toward roadway performance and asset management. This approach models the complex interactions that occur between these agents in a complex system. Most modeling approaches in the domain of infrastructure asset management take a purely asset-centric approach and fail to address these socio-technical interactions.

Design/methodology/approach

Interactions among political decision makers, asset management strategy developers, and road users are modeled using a game-theoretic approach. The interactions are modeled as a non-cooperative game in which politicians, asset managers, and road users are the main players. Each player is autonomous and aims to come up with the set of moves to maximize their respective level of satisfaction in response to other players’ moves. Multi-attribute utility theory is used to deal with multitude of players’ goals, and the Nash equilibria of the game are south out to develop appropriate strategies for different players.

Findings

An illustrative example for a road network of a Canadian city is used to demonstrate the developed methodology. The developed methodology demonstrates how behaviors of various agents involved in the sphere of asset management impacts their collective decision-making behavior.

Originality/value

The developed framework provides asset managers and political decision makers with a valuable tool to evaluate the impact of public policy decisions related to asset managers on road performance and the overall satisfaction of road users.

Details

Built Environment Project and Asset Management, vol. 4 no. 1
Type: Research Article
ISSN: 2044-124X

Keywords

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Article
Publication date: 8 July 2019

Ata Allah Taleizadeh and Mahtab Sherafati

This paper aims to present various three-level service contracts among the following three participants: a manufacturer, an agent and a customer. The interaction between…

Abstract

Purpose

This paper aims to present various three-level service contracts among the following three participants: a manufacturer, an agent and a customer. The interaction between the aforementioned participants will be modeled using the game theory approach. Under non-cooperative and cooperative games, the optimal sale price, warranty period and warranty price for the manufacturer and the optimal maintenance cost (repair cost) and marketing expenditure for the agent are obtained by maximizing their profits. The satisfaction of the customer is also maximized by being able to choose one of the suggested options from the manufacturer and the agent, based on the risk parameter.

Design/methodology/approach

Three-echelon supply chains with marketing and warranty services are studied. Game-theoretic approaches (non-cooperative and cooperative) are presented. The non-cooperative approaches are static (NE) and dynamic (Stakelberg) models. The cooperative approach is related to bargaining models (Nash bargaining games). The authors develop a sensitivity analysis of some parameters and their effect.

Findings

Based on the mentioned drawbacks (i.e. lack of a model containing warranty, marketing and pricing), despite their importance, a developed model is proposed in this research to cover one of the research gaps. In addition, main contributions of this paper that differentiate it from the existing papers are regarding inventory, lost sale and lost goodwill, which are significant in the comparison environment. Another advantage of this study is related to the solution approach, the game theory. Twofold of the games theoretical, i.e. cooperative (in three forms) and non-cooperative are considered, because of their importance. Three types of non-cooperative games are presented as follows: Nash equilibrium – each echelon decides respectively and simultaneously; manufacturer-Stackelberg – the manufacturer has more power than the agent and the agent has more power than the customer; and customer-Stackelberg – customer is leader of the agent and the agent is the leader of manufacturer. The involved cooperative game in this paper is the bargaining problem that the participants can determine how to share the additional profits.

Originality/value

In this paper, various three-level service contracts will be presented among the following three participants: a manufacturer, an agent and a customer. The interaction between the aforementioned participants will be modeled using the game theory approach. Under non-cooperative and cooperative games, the optimal sale price, warranty period and warranty price for the manufacturer and the optimal maintenance cost (repair cost) and marketing expenditure for the agent are obtained by maximizing their profits. The satisfaction of the customer is also maximized by being able to choose one of the suggested options from the manufacturer and the agent, based on the risk parameter. Several numerical examples are used to illustrate the models presented in this paper. Finally, the authors develop a sensitivity analysis of some parameters and their effects on the objective functions.

Details

Journal of Modelling in Management, vol. 14 no. 3
Type: Research Article
ISSN: 1746-5664

Keywords

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Article
Publication date: 6 August 2019

David Kim Hin Ho, Eddie C.M. Hui, Tai Wing Ho and Satyanarain Rengarajan

This paper aims to examine the behavior of “rational” residential developers, under game theory, for their pricing strategy in a competitive environment.

Abstract

Purpose

This paper aims to examine the behavior of “rational” residential developers, under game theory, for their pricing strategy in a competitive environment.

Design/methodology/approach

Results show that residential developers cooperate implicitly for long-term benefit, leading to a slow-down in sales. Developers are motivated to deviate from cooperating at the beginning and at the end of successive periods in a sub-market. Relatively high profits, earnable in the first few periods, provide an allowance to undercut prices and improve sales. For the last few periods, the punishment for any deviation from cooperating is insignificant or zero. Note that the first-mover advantage in a new market is evident. On the effect of uncertainty on the developer’s residential prices, results show that as uncertainty increases, prices decrease while price variability increases.

Research limitations/implications

This study highlights the merits of a uniquely simplified experimental research design for the strategic behavioral pricing of the private residential development market using a game theoretic approach.

Practical implications

This study enhances the understanding of the residential development strategy of developers in the residential development market.

Originality/value

There is limited research on pricing strategy for the private residential development market in Asia.

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Article
Publication date: 11 September 2017

Byung-In Park and Hokey Min

In times of increasing shipping risks and uncertainty, the purpose of this paper is to analyze fiercely competitive shipping markets in the Asia-Pacific region and help…

Abstract

Purpose

In times of increasing shipping risks and uncertainty, the purpose of this paper is to analyze fiercely competitive shipping markets in the Asia-Pacific region and help the carriers develop the optimal pricing schemes, shipping networks (e.g. routes and shipping frequency), and future investment plans.

Design/methodology/approach

This paper develops viable maritime logistics strategies based on the non-cooperative game theory which determines the optimal vessel size/type, shipping route, and shipping frequency, while taking into account multiple cost components and unpredictable shipping market dynamics.

Findings

This study revealed that the container carrier’s optimal shipping strategy was insensitive to changes in freight rates, fuel prices, and loading/unloading fees at the destination ports. However, it tends to be more sensitive to an increase in the shipping volume than the aforementioned parameters. In other words, aggressive pricing schemes and drastic cost-cutting measures alone cannot enhance carrier competitiveness in today’s shipping markets characterized by overcapacity and weak demand.

Originality/value

This paper is one of a few attempts to identify a host of factors influencing the container carrier’s competitiveness using the game theory and develop an optimal shipping strategy in the presence of conflicting interests of multiple stakeholders (e.g. carriers, shippers, and port authorities). To validate the rigor and usefulness of the proposed game-theoretic model, the authors also experiment it with an actual case study of container carriers serving the Northeast Asian shipping market.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 29 no. 4
Type: Research Article
ISSN: 1355-5855

Keywords

Content available
Article
Publication date: 22 March 2019

Sanjay Prasad, Ravi Shankar and Sreejit Roy

The purpose of this paper is to study the impact of bargaining powers of firms in supply chain coordination. It studies selected aspects of bargaining powers, namely…

Abstract

Purpose

The purpose of this paper is to study the impact of bargaining powers of firms in supply chain coordination. It studies selected aspects of bargaining powers, namely, impatience, breakdown probability and outside options, and uses a bargaining-theoretic approach to analyze surplus allocation in a coordinated supply chain.

Design/methodology/approach

This paper proposes one-supplier one-buyer infinite horizon supply chain coordination game, where suppliers and buyers negotiate for the allocation of supply chain surplus arising out of supply chain coordination. Various aspects of the bargaining power of the negotiating parties are modeled and the paper studies impact of power levels on the results of the bargaining game.

Findings

A significance of impatience on the bargaining process and the surplus split has been established. This paper also demonstrates a rather counter-intuitive aspect of bargaining that the impatience (as perceived by the other party) can improve the bargaining position and therefore share of profits.

Research limitations/implications

This paper has limited its analysis to three key components of bargaining power. Future works can study other aspects of bargaining power, namely information asymmetry, learning curve, inside options, etc. Further, the paper has considered an infinite horizon model – this assumption can be relaxed in future research.

Practical implications

Equations to derive optimal split of the surplus have been derived and can be leveraged to design an autonomous bargaining agent to discover equilibrium profit splits in a cloud or e-commerce setting. Further, insights from this paper can be leveraged by managers to understand their relative bargaining power and drive to obtain the best profit split.

Originality/value

This paper establishes that impatience (in terms of counter-offer probability) has a significant impact on the bargaining position and on the split of the surplus that the firm can get for themselves. It establishes the advantage of higher levels of impatience, provided the other party recognizes the impatience and factors it in their decision-making process.

Details

Journal of Advances in Management Research, vol. 16 no. 3
Type: Research Article
ISSN: 0972-7981

Keywords

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Article
Publication date: 8 May 2017

Mo Li and Bang Nguyen

This paper aims to provide academics and practitioners working with collaboration of technology information and innovation with a review of key interfirm-collaboration…

Abstract

Purpose

This paper aims to provide academics and practitioners working with collaboration of technology information and innovation with a review of key interfirm-collaboration topics, such as the determinants of innovation activity, innovation, imitation, the impact of competition, collaboration versus competition and a review of game theoretic approaches.

Design/methodology/approach

This paper is a comprehensive review of extant literature, conducted and analyzed systematically.

Findings

This paper highlights that when firms absorb collaboration opportunities that involves information, there are critical elements for success, which need to be considered, including economies of scale, knowledge sharing, market size and volatility, strategic partner selection, intellectual property rights, spillover effects, collaboration costs, trust and commitment, opportunism and overall collaboration strategy.

Originality/value

This paper contributes to existing information literature by emphasizing various game theoretic approaches, which highlight how collaboration costs are shared when collaboration occurs. In conclusion, ten managerial implications are offered about collaboration of information technological innovation.

Details

The Bottom Line, vol. 30 no. 1
Type: Research Article
ISSN: 0888-045X

Keywords

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Article
Publication date: 13 August 2019

Raziyeh Reza-Gharehbagh, Ashkan Hafezalkotob, Ahmad Makui and Mohammad Kazem Sayadi

This study aims to analyze the competition of two financial chains (FCs) when the government intervenes in the financial market to prohibit the excessively high-interest…

Abstract

Purpose

This study aims to analyze the competition of two financial chains (FCs) when the government intervenes in the financial market to prohibit the excessively high-interest rate by minimizing the arbitrages caused by speculative transactions. Each FC comprises an investor and one intermediary, attempts to finance the capital-constrained firms in financing needs.

Design/methodology/approach

Using a Stackelberg game theoretic framework and formulating two- and three-level optimization problems for six possible scenarios, the authors establish an integrative framework to evaluate the scenarios through the lens of the two main decision-making structures of the FCs (i.e. centralized and decentralized) and three policies of the government (i.e. speculation minimizing, revenue gaining and utility maximizing).

Findings

Solving the problem results in optimal values for tariffs, which guarantee a stable competitive market. Consequently, policymaking by the government influences the decision variables, which is shown in a numerical study. The authors find that the government can orchestrate the FCs in the competitive market by imposing tariffs and prohibiting high-interest rates via regulating the speculation impacts, which guarantees a stable market and facilitates the financing of capital-constrained firms.

Research limitations/implications

This paper aids the financial markets and governments to control the interest rate by minimizing the speculation level.

Originality/value

This paper investigates the impact of government intervention policies – as a leading player – on the competition of FCs – as followers – in providing financial services and making profits. The government imposes tariffs on the interest rate to stabilize the market by limiting speculative transactions. The paper presents the mathematical models of the optimization problems through the game-theoretic framework and comparison of the scenarios through a numerical experiment.

Details

Kybernetes, vol. 49 no. 3
Type: Research Article
ISSN: 0368-492X

Keywords

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